Business Today

By wire services
Published October 29, 2003

SONY ANNOUNCES RESTRUCTURING: The Sony Corp. announced a three-year plan Tuesday that includes laying off 20,000 workers, ending production of older-model TV sets in Japan, sharply cutting the numbers of parts and suppliers and starting a joint venture to make flat screens with its archrival, Samsung Electronics of South Korea. The plan is intended to save $3-billion in annual operating costs by 2006, increasing Sony's profit margins to 10 percent, from a forecast 4 percent this year. "This is the survival story for Sony," Kun Soo Lee, a consumer electronics analyst at Credit Lyonnais Securities, said after the company's news conference in Tokyo. "If we look at Sony's activity in the past, they showed they have speed. They will be competitive again in two years."

SYKES AIMS MORE OVERSEAS: Shares of Sykes Enterprises' stock soared 26 percent Tuesday, to $9.37, after the Tampa call center operator reported better-than-expected quarterly earnings and upped its 2003 projections. The news for Sykes' U.S. and Western European employees was less cheery. In a conference call with Wall Street analysts, company officials said its clients are demanding prices it can provide only in low cost locales like India or the Philippines. That may mean more layoffs or closures elsewhere.

MICROSOFT SETTLES 6 LAWSUITS: Microsoft Corp. has agreed to settle class action antitrust and unfair competition lawsuits brought by customers in Kansas, North Carolina, North Dakota, South Dakota and Tennessee and the District of Columbia for vouchers worth $200-million. All the cases involve customers who said Microsoft violated state antitrust laws and laws against unfair competition. Microsoft has now settled similar lawsuits in nine states and Washington for a total of $1.55-billion. The company said class actions are pending in Arizona, Iowa, Minnesota, New Mexico and Wisconsin.

FOUR QUIT FREDDIE MAC: Four more Freddie Mac employees, including one in charge of overseeing the mortgage buyer's market risk, have left the company amid a federal investigation into its $4.5-billion earnings restatement. Robert Dean, senior vice president of market risk oversight, and Mustafa Chowdhury, vice president of asset and liability management, resigned last week, Bloomberg Business News reported. Byron Boston, a vice president of investments, and mortgage bond trader Smriti Popenoe also left last week, Bloomberg said, quoting people familiar with the matter.

ELECTRONIC TRANSFER LAW SIGNED: President George W. Bush enacted a bill making it easier for banks to save time and reduce costs by processing checks electronically. Deputy White House Press Secretary Claire Buchan said, "This will have the effect of modernizing our financial system." More than 40-billion checks written by consumers, businesses and the government are processed every year. The new law means banks won't have to ship paper checks back to originating banks, a change prompted in part by the 9/11 attacks because the grounding of planes delayed check-clearing.

RATE RISES ON 4-WEEK BILLS: The interest rate on the U.S. Treasury's four-week bills rose from a week earlier at the government's auction of the securities. The Treasury sold $21-billion of the bills at a discount rate of 0.96 percent, up from 0.895 percent last week, for the highest since 0.985 percent on Aug. 26. The return to investors was 0.973 percent for the bills, with a $10,000 Treasury bill selling for $9,992.30.

NORTHWEST ADDS SRQ FLIGHT: Sarasota-Bradenton International Airport has persuaded Northwest Airlines Corp. to add a daily flight from Minneapolis this winter, another sign that the airport might be emerging from a protracted slump that has taken a toll on revenues and passenger traffic. The new flight will operate from Feb. 12 through April 13. The new service to and from Minneapolis means SRQ will have 36 flights for 2004 that were not available in 2003.

ID THEFT HOTLINE PREPARED: Victims of identity theft will be able to alert banks, credit card companies and law enforcement with one phone call under a pilot program announced Tuesday. The Financial Services Roundtable, which represents 100 institutions handling about 70 percent of the economy's financial transactions, is creating an Identity Theft Assistance Center to help fight the rising incidence of the crime. The organization expects the center to be up and running before the middle of 2004. The Federal Trade Commission, in the most comprehensive government survey of the problem, said last month that identity theft cost consumers and businesses $53-billion last year.

IBM PLANS STOCK BUYBACK: International Business Machines Corp. authorized spending $3.5-billion to repurchase its stock. A quarterly cash dividend of 16 cents a share payable Dec. 10 to shareholders of record Nov. 10 also was announced by the company in a statement.

Earnings

Verizon Communications Inc.: The telecommunications company earned $1.79-billion in the third quarter, edging reduced forecasts, as more strong gains in wireless and long distance helped offset mounting customer losses in the local telephone business.

Executives insisted that the company's focus on local-long distance packages is helping stabilize the wireline business but rejected the suggestion that it needs to join the industry fray in cutting prices for cellular and high speed Internet service.

R.J. Reynolds Tobacco Holdings Inc.: RJR's shares gained more than 13 percent Tuesday as investors shrugged off the cigarette company's huge third quarter loss and slumping sales, and focused instead on its plan to merge with rival Brown & Williamson.

Nicholas Financial Inc.: The Clearwater car finance company reported record revenues and net income for the second quarter ended Sept. 30. Net income rose 15 percent from the same period a year ago on a 10 percent increase in revenues. Assets increased to $98.5-million. The company has 28 branches, including its first in Detroit, which opened during the quarter. It plans to expand into Virginia during the next year.

Avon Products Inc.: The world's largest direct seller of beauty products said third-quarter profits rose 47 percent, helped by robust international sales as well as strong revenues from a new anti-wrinkle cream and the company's new cosmetics line aimed at young women. The results, announced Tuesday, exceeded analysts' estimates, and Avon raised its yearly earnings forecast.